In this course we dive into operating cash flows, an important component of the statement of cash flows! What’s included in operating cash flows, and what is not. Why does operating cash flow differ from net income, and when should we be concerned? How do I reconcile the differences between operating cash flows and net income? What do these reconciliations tell me about the company’s growth and management of current assets and liabilities? We will cover all these important questions, and more importantly teach YOU to how to both prepare and analyze operating cash flows.

Course Key Concepts: Operating Cash Flows, Statement of Cash Flows, Indirect Method, Direct Method, Accruals, Financial statement analysis, GAAP financial statements.

Learning Objectives
  • Identify what type of firm activities are included in operating cash flows.
  • Identify causes for why net income differs from operating cash flow.
  • Explore and successfully reconcile differences between net income and operating cash flows.
  • Recognize how changes in the balance sheet are reflected in the statement of cash flows.
Last updated/reviewed: August 6, 2023
2 Reviews (13 ratings)


Member's Profile
A great review for someone who hasn't needed to do these calculations since their accounting courses. If you're new to this subject it might go a bit fast, but is a good general introduction.

Member's Profile
Good course. But some of the questions were not stated as clearly. Bucket illustrations were helpful.

Course Complexity: Foundational
This is an intermediate accounting course and assumes the student has a basic understanding of accounting, particularly identify the balance sheet (i.e., assets = liabilities + shareholders’ equity), and the journal entry process (e.g., record a sale on account by debiting accounts receivable and crediting sales revenue).
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
  Introduction to Mastering Operating Cash Flows0:35
  What are Operating Cash Flows3:46
  Organization of Statement of Cash Flows4:12
  Two methods for Operating Cash Flows4:28
  Step 1 of Indirect Method5:20
  Step 2 of Indirect Method11:04
  Step 3 of Indirect Method12:40
  Step 3 of Indirect Method Cont'd8:50
  Exercise 18:15
  Exercise 210:48
  Mastering Operating Cash Flows1:10:25
  Slides: Mastering Operating Cash Flows: Indirect and Direct MethodsPDF
  Mastering Operating Cash Flows: Indirect and Direct Methods Glossary/IndexPDF
  Lockheed Martin 4Q 2021 Earnings Release Financial TablesXLXS